1 Introduction

1.1 Background

Castle Peak Power Company Limited (CAPCO), a joint venture between CLP Power Hong Kong Limited (CLP) and ExxonMobil Energy Limited (EMEL), is presently pursuing a secure and sustainable supply of natural gas to replace its natural gas fuel supply from the existing Yacheng 13-1 field which is expected to be depleted as early as 2012.

The Hong Kong Special Administrative Region (HKSAR) Government’s environmental policy includes the control of emissions from existing power stations in Hong Kong. Central to this effort is to increase the use of natural gas. As a consequence, natural gas is positioned to play an increasingly important role in the generation of electricity. A stable, cost-efficient way to supply natural gas to Hong Kong will play a key role in the continued use of gas at Black Point Power Station (BPPS) facilitating CAPCO’s ability to comply with Government’s air emission standards.

On 28 August 2008, the HKSAR Government signed a Memorandum of Understanding (MoU) with the National Energy Administration of the Central People’s Government (NEA) in support of continuous supply of natural gas to Hong Kong in the coming two decades ([1]). As part of the MoU, the NEA supports the China National Offshore Oil Corporation’s (CNOOC) renewal of its supply agreement with Hong Kong for a further term of 20 years.

In addition, according to the MoU, it was agreed, in principle, that the feasibility of supplying natural gas to Hong Kong via the Second West-East Natural Gas Pipeline would be studied, and that the Mainland would jointly build with party(ies) in Hong Kong a LNG terminal on the Mainland for supplying natural gas to Hong Kong.

The MoU has enabled CAPCO to negotiate with Mainland gas suppliers to obtain replacement gas for BPPS via new submarine gas pipelines. This Project, namely Black Point Gas Supply Project, will provide necessary facilities to enable replacement gas supplies from Mainland China to CAPCO.

Preliminary discussion with Mainland gas suppliers has indicated that the gas export facilities are likely to be located in southern Guangdong Province, on the western Shenzhen and eastern Zhuhai coastline. The cross boundary nature of the proposed submarine pipelines linking the Mainland gas export facilities with BPPS is expected to involve the regulatory and permitting systems of both the Mainland authorities and HKSAR government.

It is estimated that the BPPS can consume up to about 3.4 billion cubic metres (BCM) of natural gas a year. Increase in demand for electricity and progressive tightening of emission caps may further increase CAPCO's annual gas demand. The increasing gas demand and the depleting gas supply from Yacheng 13-1 field require replacement gas to be available in 2012. To meet the 2012 target, it is essential that the gas pipeline(s) between Black Point and Mainland China and associated facilities be timely permitted for construction.

The submarine pipeline(s) in Hong Kong waters and the GRSs will require an Environmental Permit (EP) from the HKSAR Government under the Environmental Impact Assessment Ordinance EIAO (Cap. 499). In preparing this Environmental Impact Assessment (EIA) Report to support the Environmental Permit Approval, CAPCO has complied with the requirements of the EIA Study Brief (ESB-208/2009) and made cross reference to the design and environmental impacts previously presented in the EIA Report for the Hong Kong Liquefied Natural Gas (HKLNG) project (formally entitled Liquefied Natural Gas (LNG) Receiving Terminal and Associated Facilities; Register No.: AEIAR-106/2007) ([2]) which was submitted formally under the EIAO on 19 October 2006 and approved on 3 April 2007. An Environmental Permit to construct and operate the HKLNG project was awarded to CAPCO on 3 April 2007 under reference EP-257/2007.

Permits to construct and operate the submarine pipeline(s) and the associated gas export facilities in Mainland China will be handled by PRC gas suppliers and are therefore not the subject of this EIA. However, where appropriate, an assessment of potential water quality impacts associated with the facilities construction in Mainland waters has been included to examine project-specific cumulative impacts.

1.2 Purpose & Nature of the Project

This Project will provide facilities to import replacement gas from the Mainland. The present proposal will involve the construction and operation of two submarine natural gas pipelines connecting BPPS with gas export facilities in Mainland China, and two GRSs at BPPS ([3]).

The proposed pipelines will traverse from BPPS to natural gas export facilities in southern Guangdong Province, across the Urmston Road shipping channel and the Tonggu Waterway. They will be installed to the north of the existing Yacheng 13-1 Pipeline by approximately 100 – 200 m ([4]), and will be about 200 – 300 m to the north of the proposed pipeline that was included in the HKLNG EIA ([5]). Indicative routing of the proposed pipelines is depicted in Figure 1.1.

Figure 1.1 Indicative Alignment of the Cross-Boundary Submarine Gas Pipelines Connecting the BPPS and the New Gas Export Facilities in Mainland China

The two GRSs are proposed to be located at BPPS and it is expected that they will be constructed in two phases. The First Phase GRS will be constructed and operated within the site boundary of the BPPS, co-located with the existing GRS operated by CNOOC (hence referred to as the Co-located GRS). The Second Phase GRS will be constructed and operated on newly reclaimed land (approximately 0.5 ha of land area) constructed along the existing artificial seawall of the BPPS (hence referred to as the GRS on reclamation). It should be noted that the site for the new reclamation will be the same as that proposed for the GRS of the South Soko option in the HKLNG EIA ([6]). The proposed locations of the GRSs are presented on Figure 1.2.

Figure 1.2 Suggested Location of the Gas Receiving Stations (GRSs)

Note: The Outfall, Service Berth and Seawater Intake are existing facilities of BPPS and hence are not part of this Project.

The following elements of the Project addressed in this EIA Report are classified as Designated Projects under the Environmental Impact Assessment Ordinance (Cap. 499) (EIAO):

· Schedule 2, Part I, Item H.2 – Installation of submarine gas pipelines connecting the proposed Gas Receiving Stations at the Black Point Power Station (BPPS) and gas export facilities in southern Guangdong Province.

· Schedule 2, Part I, Item C.12 – A dredging operation exceeding 500,000 m³ for the reclamation and pipeline trenches.

1.3 Purpose of this EIA Report

This EIA Report is prepared by ERM-Hong Kong, Limited (ERM) in accordance with the EIA Study Brief (No. ESB-208/2009) and the Technical Memorandum of the Environmental Impact Assessment Process (EIAO-TM).

The purpose of this EIA Study is to provide information on the nature and extent of environmental impacts arising from the construction and operation of the Project and related activities that take place concurrently. This information will contribute to decisions by the Director of the Environmental Protection on:

· The overall acceptability of any adverse environmental consequences that may arise as a result of the Project and the associated activities of the Project;

· The conditions and requirements for the detailed design, construction and operation of the Project to mitigate against adverse environmental consequences wherever practicable; and

· The acceptability of residual impacts after the proposed mitigation measures are implemented.

The detailed requirements of the EIA Study are set out in Clause 3 of the EIA Study Brief. As specified in the EIA Study Brief, the EIA Study has addressed the key environmental issues associated with the construction and operation of the Project in Hong Kong waters and land.

1.4 Site Location & History

Black Point is the western-most part of the New Territories, and is comprised of a headland extending from the east (land) to the west (sea) with granitic soil underneath, which is typical of the Tuen Mun and Castle Peak areas. The major development at Black Point is the BPPS (the first natural gas-fired plant in Hong Kong), which is located to the north of the headland. The lowland areas at the southeastern edge of the headland are occupied by an orchard, concrete batching plant and cargo storage site. To the west of Black Point lies the route of the Urmston Road shipping channel and Tonggu Waterway, both of which have a depth of > -15 mPD at present.

1.5 Scoping of Environmental Issues

The potential environmental impacts which may arise from the construction and operation of the Project were identified and discussed in the Project Profile for this EIA. The specific scope for this EIA Study is presented in Clause 3.2 of the EIA Study Brief.

1.6 Structure of the Report

Following this introductory section, the remainder of this EIA Report is arranged as follows:

Section 2 This section of the EIA Report presents the findings of assessments in considering alternative locations for the GRSs at BPPS and alternative construction methods for the proposed facilities. This section concludes with an introduction to the preferred scenario for the GRSs and the submarine gas pipelines.

Section 3 Provides a description of the Project highlighting the key facilities to be constructed, the timeline for implementing the Project and the operational activities. This section forms the basis of the technical assessments presented in Sections 4 – 12 below.

Section 4 Presents details of an assessment of impacts from the construction and operation of the Project to air quality sensitive receivers.

Section 5 Presents details of an assessment of impacts from the construction and operation of the Project to noise sensitive receivers.

Section 6 Details the assessment of impacts to water quality sensitive receivers arising from the construction and operation of the Project.

Section 7 Presents the waste management implications from construction and operation of the Project.

Section 8 Presents details of an assessment of impacts from the construction and operation of the Project to marine ecological resources.

Section 9 Details the assessment of impacts to fisheries resources and fishing operations arising from the construction and operation of the Project.

Section 10 Presents the details of an assessment of impacts from the construction and operation of the Project to landscape and visual sensitive receivers.

Section 11 Details the assessment of impacts from the construction and operation of the Project to cultural heritage resources.

Section 12 Presents the quantitative risk assessment from the construction and operation of the Project.

Section 13 Presents a summary of the environmental outcomes of this EIA Study.

Section 14 Introduces a summary of the environmental monitoring and audit (EM&A) measures for the Project.

Section 15 Presents the conclusions of the EIA Study.

([1]) HKSAR (2008) Memorandum of Understanding on Energy Co-operation. Press Release. Accessed on <http://www.info.gov.hk/gia/general/200808/28/P200808280188.htm>

([2]) ERM (2006) Liquefied Natural Gas (LNG) Receiving Terminal and Associated Facilities: EIA Study (EIA Study Brief ESB-126/2005). Prepared for CAPCO

([3]) Each proposed pipeline requires a dedicated GRS because the natural gas coming from different sources will have different compositions and pressures, requiring specific conditioning to meet the supply contract condition. Also these gas sources have to be fiscal metered individually for commercial purpose.

([4]) The proposed Pipeline 1 will be located at about 100 m north of the existing Yacheng 13-1 Pipeline.